By Brazil Stock Guide – Brazil’s central bank and the European Central Bank said on Thursday they have begun assessing a potential link between Pix, Brazil’s instant payment system, and TIPS, the Eurosystem’s instant payment settlement infrastructure.
The study will examine technical, operational, legal and business issues before any decision is made on whether to move ahead with the connection. No timetable has been announced for completing the assessment or for a potential launch.
If implemented, the link would mark a new step in the international expansion of Pix and could allow transfers between Brazil and European countries to be completed within seconds, with recipients receiving funds directly in their local currency.
The initiative is aimed at addressing some of the main shortcomings of traditional cross-border payments, including high costs, slower settlement times and the involvement of multiple intermediaries.
TIPS, short for TARGET Instant Payment Settlement, is a public Eurosystem infrastructure that settles instant payments in central bank money. It currently supports the euro, Swedish krona and Danish krone, with additional currencies from the European Economic Area expected to be added.
The talks with Brazil are part of a broader ECB strategy to connect TIPS with instant payment systems outside Europe. The Eurosystem is already working on initiatives involving India, Switzerland and Nexus, a multilateral project designed to connect domestic instant payment platforms.
For Brazil’s central bank, the initiative represents another step toward turning Pix from a predominantly domestic infrastructure into a platform capable of linking with payment systems abroad.
A potential connection with Europe is particularly relevant given the volume of trade, investment, tourism and remittance flows between the two regions. A direct link between the two infrastructures could reduce reliance on traditional correspondent banking chains for some transactions.
That does not mean, however, that Brazilian users will soon be able to use a Pix key to pay any merchant in Europe. The structure of the connection, foreign-exchange rules, currency conversion, eligible participants and the final user experience for consumers and businesses have yet to be defined.
The project also fits into a broader G20 effort to make cross-border payments faster, cheaper and more transparent.
If the integration moves forward, a payment or remittance initiated in Brazilian reais could, in principle, reach a recipient in Europe in euros — or another supported currency — within seconds.
That would represent a significant change in scale for Pix. Created as a domestic instant payment system, it could become one of Brazil’s gateways into an emerging international network of real-time payments.
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